Gold and Silver Technical Analysis: Recovery from Major Support Signals Next Upside Phase
Author: Muhammad Umair
Published: February 09, 2026
Overview
Gold prices have surged to $5,000, driven by a weaker U.S. dollar, ongoing central bank purchases, and reduced market volatility. This recovery comes as traders await key economic data, including the U.S. labor market report and inflation indicators.
Market Dynamics
The decline in the U.S. dollar is attributed to concerns regarding the Federal Reserve's independence, particularly following U.S. Treasury Secretary Scott Bessent's comments about a potential criminal investigation involving Kevin Warsh. This uncertainty has pressured the dollar, which in turn supports gold prices, as gold is dollar-denominated.
Additionally, the People's Bank of China (PBOC) has been a significant buyer of gold, increasing its reserves for the 15th consecutive month, which bolsters the long-term outlook for gold. China's strategic diversification away from dollar-based reserves adds a solid demand foundation for gold.
Technical Analysis of Gold
The daily chart indicates that gold has found robust support around the 50-day Simple Moving Average (SMA) and an ascending broadening wedge pattern. A bullish hammer formation at this support level suggests potential for further upside, although a break above $5,090 is necessary to confirm this bullish trend.
On the 4-hour chart, gold shows strong support at $4,400, with bullish price action indicating a likely continuation of the upward trend. The Relative Strength Index (RSI) is also rebounding from oversold levels, increasing the likelihood of a breakout.
Technical Analysis of Silver
Silver has also demonstrated strength, with a bullish hammer formation at the major support level of $64, indicating potential for a rise towards $100. A break above this resistance level would signal further bullish momentum. The 4-hour chart shows a recovery from the $60 to $70 range, reinforcing the bullish outlook for silver.
Conclusion
Both gold and silver are showing signs of strength following recent corrections, supported by solid technical indicators. Gold's rise to $5,000 is underpinned by a weak dollar, central bank accumulation, and growing uncertainty regarding the Fed's independence. For gold to maintain its bullish momentum, it must break above $5,090. Similarly, silver's recovery from the $60-$70 region suggests continued upward potential, with $100 as a critical resistance level for the next rally phase.
About the Author
Muhammad Umair is a finance MBA and engineering PhD, specializing in currencies and precious metals. He leads a team providing advanced market analytics and trading strategies through his platform, Gold Predictors.